Publications > Publications > Working Papers > The role of knowledge in the socio-ecological transition

Research papers to download

David Bailey, Lisa De Propris and Jürgen Janger, New industrial policy for more inclusive and sustainable growth, WWWforEurope Policy Brief No. 9, August 2015

Reinhilde Veugelers, Too much or not enough heterogeneity in Innovation Policies among EU Member States? WWWforEurope Policy Brief No. 8, August 2015

Reinhilde Veugelers, What innovation policies for ecological transition? Powering the green innovation machine. WWWforEurope Working Paper No. 73, December 2014

Francesco Crespi, Claudia Ghisetti, and Francesco Quatraro, Taxonomy of implemented policy instruments to foster the production of green technologies and improve environmental and economic performance. WWWforEurope Working Paper No. 90, March 2015

Alessandra Colombelli, Jackie Krafft, and Francesco Quatraro, Eco-innovation and firm growth: Do green gazelles run faster? Microeconometric evidence from a sample of European firms. WWWforEurope Working Paper No. 88, March 2015

Reinhilde Veugelers, The contribution of academic research to innovation and growth. WWWforEurope Working Paper No. 71, December 2014

Christian Ketels, Competitiveness and Clusters: Implications for a New European Growth Strategy. WWWforEurope Working Paper No. 84, February 2015

The role of knowledge in the socio-ecological transition

Economic growth and more dynamics are needed in Europe, at least in the short run. This can only be achieved by enhancing all capacities concerning knowledge – knowledge that would foster radical environmental innovation and thereby contribute to a more sustainable economic and social model with a higher quality of life.

The WWWforEurope Policy Brief No.9 by David Bailey (Aston University), Lisa De Propris (University of Birmingham), and Jürgen Janger (Austrian Institute of Economic Research) looks at "New industrial policy for more inclusive and sustainable growth". The first game changer would be to shift to a "green" industrial policy as fears are unfounded that this might cost jobs. On the contrary, especially for countries on the productivity frontier, employment growth may increasingly depend on the ability of firms to develop environment-friendly innovations. This needs, as second game changer, a technological shift towards radical innovation and more public support and funding of bridging technologies (particularly in the university systems). But it also needs as third game changer: massive social enhancement through education and training, focussing on reduction of inherited differences in education and effective re-training in times of structural change.

A new industrial policy should therefore build on a systemic and cross cutting strategy aiming at "beyond GDP goals", shifting the focus to "green" innovation. A stable and reliable framework for this depends on a set of "green" taxes, subsidies and regulations, on mission-oriented programmes, on support for dynamic yet social entrepreneurship and on skills upgrading, both in the education system and the universities.

Reinhilde Veugelers (KU Leuven) asks whether there is "Too much or not enough heterogeneity in Innovation Polices among EU Member States?" in WWWforEurope Policy Brief No. 8. Different EU countries have different innovation systems and traditions and therefore different innovative capacities. There has been some convergence but especially the modest innovators have a rather sluggish development. Firm investment and research systems are the weakest spots of the European innovation capacity with particular high heterogeneity between countries. Interestingly, there is much less heterogeneity in policy instruments, although it would be advisable to support the absorption and adoption of already existing frontier technologies for catching-up countries. So, the policy conclusion is: To overcome the differences in innovation outcomes, innovation policies have to become more varied and adapt to individual countries.

In addition to these Policy Briefs there are a number of papers dealing with the issues of sustainable innovation and industrial policies in detail. Reinhilde Veugelers (KU Leuven) asks the question: “What innovation policies are there for ecological transition?” Her findings contain good news but also bad news. The green innovation machine is gaining speed, but the bad news is that it is far from taking off. To name one example: Less than one percent of total patents in the world are about Clean Energy Technologies (CET). Additionally, Europe is far from being in an uncontested front-runner position. As an economic region the EU has a slightly higher relative share in worldwide CET patents than in all patents, but it is closely followed by the United States and Japan, and it is surpassed by China and Korea.

The good news is that WWWforEurope researchers and other scientists have found clear evidence that governmental policies work in incentivising green innovation, especially when they are implemented to complement each other: To get the biggest effect in the shortest time, it is necessary to increase environmental taxes, to subsidise R&D in green technologies, and to set up clear rules and regulations. It is important that these policies are long-term consistent so that the private sector can adapt its strategies. Francesco Crespi (Università degli Studi Roma Tre), Claudia Ghisetti (University of Ferrara) and Francesco Quatraro (Università degli Studi di Torino) underline these findings in their paper "Taxonomy of implemented policy instruments to foster the production of green technologies": When seeking to maximise the ecological effectiveness of innovations, it is important not to go for incremental, but for radical innovations. A smart mix of instruments has to cover the entire innovation life-cycle by relying primarily on market-based incentives (like taxes) and on regulation, while voluntary agreements and pure information-based instruments prove to be rather ineffective.

Focusing and fostering green innovation produces a double dividend, as Alessandra Colombelli, Jackie Krafft (both Universitè Nice Sophia Antinopolis) and Francesco Quatraro (Università degli Studi di Torino) show in their paper "Eco-innovation and firm growth: Do green gazelles run faster?" Indeed they do: High growth firms (gazelles) producing green technologies are much more connected to innovation and grow faster than other gazelles. Moreover this can initiate a bandwagon effect in the economy, spreading along the value chain.

A second paper by Reinhilde Veugelers (KU Leuven) is on "The contribution of academic research to innovation and growth". Although the analysis is flawed by lack of data, it is well established by now that public funding of R&D raises productivity in all of the economy, but the links between industry and science are not always direct or close. Especially in Europe the gap between the two seems particularly wide. All over the world university patenting is at a low level, but in Europe the level is especially low. 2.6% of all patenting universities (the top 25 players, of which 22 are in the US!) hold 40% of all university patents. European universities are much less active, only bringing out those ideas that have a high probability of success. This strategy produces much less impact than the active experimentation process one witnesses in US universities.

Veugelers sets forth a number of important elements to strengthen the link between science and industry: a consistent intellectual property rights regime, incentives for universities to look for commercial application of their research, and autonomous organisational units specialised in knowledge transfer (legal agreements, financial issues) to disburden researchers of this task. It also seems promising to promote university spin-offs as they, on average, create much more jobs than a typical start-up. Informal contact between universities and firms is another important element, highlighting the value of geographical proximity, science parks and regional clusters.

Clusters are also at the heart of Christian Ketels’ paper on knowledge transfer, "Competitiveness and Clusters: Implications for a New European Growth Strategy". Ketels (Harvard Business School) shows that not all clusters have to be innovative and contributive to a socio-ecological transition. Nevertheless there are a growing number of clusters in Europe that are specialised in innovative sustainability themes (eg. e-mobility or energy efficiency), thereby strengthening and modernising Europe’s new take on industrial policy. This development can and has to be boosted by coherently and consistently integrating cluster-based programs with beyond-GDP goals and the EU 2020 strategy.